Overbilling is intentional; misbilling is not; underbilling is hurting your business. More frequently than we might imagine, overbilling, misbilling, and underbilling occur. It can be challenging to stay on top of all the numbers, codes, rules, and other regulatory considerations in the fast-paced world. But you must always bill honestly and correctly. Therefore, if you notice that these principles are slipping, it may be time to look at your billing workflow and make any necessary improvements to prevent errors and keep everyone on the clean-claim route.
Medical billing is challenging, time-consuming, and stressful. After all, there are a lot of restrictions to go by, and it appears like they are updated frequently. That makes mistakes difficult to prevent—and frequently, you may not even be aware that you are doing them. Even while a single billing mistake usually won’t have a major impact, if you keep making mistakes without realising it, you run the danger of jeopardising your practise, reputation, and livelihood.
Whether your billing errors were unintentional or deliberate, your actions have repercussions, and apologising won’t help you receive the compensation you are due. Because of this, it’s essential that you comprehend the billing does and don’ts before those don’ts end up significantly hurting your bottom line. Let’s examine three of the most common ways practices can normally mess up their billing:
- overbilling, which is intentional,
- misbilling, which is accidental, and
- underbilling, which is just plain silly
Overbilling
Overbilling is an intentional tactic used to wrongfully obtain higher payments. Within the rehab therapy industry, overbilling most often occurs in the following ways:
- Upcoding: In this dishonest and abusive practise, a provider bills for diagnoses and codes that are more expensive, severe, or both than what was really diagnosed and/or performed. For instance, upcoding can happen when a physical therapist bills for therapeutic activity (97530) rather than gait training (97116), despite the fact that their treatment may more closely support the latter. This is because the former pays out more.
- Overcharging: Overcharging is a practise similar to upcoding in which extra units are added to the services provided by the therapist or extra codes are added for services that are not provided at all.
- Utilization abuse: This is the practise of making extra appointments or offering pointless services.
How to Avoid it
Overbilling is done on purpose. You are competent in your field. Maybe you weren’t aware that it was incorrect, but you are now. It’s time to stop these fraudulent actions because if you don’t, denied claims will be the least of your concerns.
In order to stop overbilling, you must only bill for the services you actually provide—medically essential services that are relevant to the patient’s treatment plan. The following factors determine if treatment is medically necessary:
- A licensed PT determines it is so based on an evaluation;
- It minimizes or eliminates impairments, activity limitations, and/or participation restrictions;
- It is provided throughout the episode of care by the physical therapist under their direction and supervision;
- It requires the knowledge, clinical judgment, and abilities of the therapist;
- It is not provided exclusively for the patient’s convenience;
- It is provided using evidence of effectiveness and applicable standards of practice; and
- The type, amount, and duration of the treatment helps a patient improve function, minimize loss of function, or decrease risk of injury (or disease).
Misbilling
Does your practice currently suffer from a denial rate above 4%? Misbilling might be to blame. Misbilling which includes manual errors, input oversights, and timing issues—typically occurs when your practice fails to:
- Identify all billable codes
- Code to the highest level of specificity
- Create a clean claim
Your payer will underpay you if your billing staff doesn’t recognise all billable codes. Of course, accurate documentation is essential for correctly identifying billable codes, so this error isn’t entirely the fault of your billers. Neither of them has the most precise coding. With the introduction of ICD-10, where claim reimbursement significantly depends on the specificity of the diagnosis codes, this still holds true and is of utmost importance. You might be wondering what makes an otherwise clean claim dirty when it comes to making a clean claim. In addition to missing or incorrect modifiers, take into account:
- Is the place of service accurate on the claim?
- Is the claim deficient in certain information, like prior authorization or the effective period of time within which the pre-approved service must be provided for reimbursement to occur?
- Are there mismatched totals or mutually exclusive codes?
- Are there errors or typos resulting from the data-entry process?
- Are you using outdated CPT codes, or does the claim list deleted or truncated diagnosis codes?
How to Avoid it
Accidents do happen, but if any of these misbilling errors are plaguing your practise, it’s time to streamline your billing workflow. Here’s how to get started on addressing the error of your practice’s misbilling ways:
1. Conduct an internal billing audit.
Keep an eye on the coding, documentation, and claim-creation procedures. Examine any denied claims carefully to find the reason for the refusal and address the issue.
2. Look for software or services that can help remedy issues.
Your billing problems, including misbilling, can be resolved with the aid of billing software or services. You may want to start looking around if your present billing service or software is permitting these issues to occur. You might want to think about using billing software or services if you don’t already. It can resolve many of these billing problems.
3. Level-set your team.
Meet with your team and ensure that everyone is on the same page no matter what. Describe the problems that are present and how they are hurting the company. After that, describe the negative effects of making these errors and, if necessary, seek new training.
4. Inspect every single denied claim.
Up to 65% of rejected claims, according to the Healthcare Financial Management Association, are never challenged or resubmitted by the providers. That must change. Make sure you examine each and every denied claim because payers frequently make mistakes and deny claims incorrectly. If you make use of a billing service, your representatives should already be advocating for you and contesting rejected claims. If you choose not to use a billing provider, set up a denial management system and assign a worker to handle appeals.
Underbilling
Underbilling happens when you don’t get paid for work you’ve done or when you don’t get repaid for expenses you’ve incurred. Every contractor, almost without exception, occasionally underbills. Underbilling, however, can negatively impact your cash flow and earnings. Worst case: If you never get paid for underbilled labour, services, or material, you can actually lose money on a job.
How to Avoid it
Too much underbilling can hurt your business and jeopardize your approval for bonding. Here are three things you should do to stop the cash-flow drain that comes from underbilling:
- Make sure your project managers get their submittals in on time. A delay in billing means your company is incurring costs but not getting paid.
- Do several takeoffs during the course of a job to prevent surprises at the end. Re-estimate labor and material so you can stay on top of costs.
- Communicate regularly with the owner. Everything should be documented, with a clear understanding of work expectations and sign-off procedures for change orders. Performing unapproved work is a serious risk.
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